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Italy: Trendsetting national collective agreement renewed

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February 28, 2017

Italy’s metalworkers’ National Collective Bargaining Agreement has been renewed and includes changes in employee benefits and employment terms and conditions.

Employer action code: Act or monitor

The four-year National Collective Bargaining Agreement (NCBA) for the metalworkers industry (CCNL Metalmeccanici), covering approximately 1.8 million employees, has been renewed for the years 2016 – 2019. The agreement, often seen as a trendsetter for other sectors, includes some significant changes in benefits, variable compensation structures and employment terms and conditions.

Key details

Changes, effective as of January 2017 unless otherwise noted, include:

  • Pensions: Mandatory company contributions to the industry-wide defined contribution fund (Fondo Cometa), the largest Italian fund, with total assets of almost 10 billion euros, will increase from 1.6% to 2% of base salary as of June 2017.
  • Health care: Supplementary health care coverage from the industry health care fund (MètaSalute) will be free and cover both employees and their dependents from October 2017. Currently, the annual employer contribution per employee is €120, while employees contribute €36 with no option to cover dependents. From October, the annual employer cost will be €156 per employee. Companies can opt out by offering an equivalent fund with the same or greater employer costs.
  • Parental leave: Leave can now be taken until the child reaches age 12 (previously age 8).
  • Benefit fund: As of June 1, 2017, employers will be subject to an annual contribution of €100 per employee to a benefit fund that employees can use for tax-favored purchase of services such as gym memberships, or to reimburse employee medical or education expenses incurred on behalf of employees or their family members. The annual contribution will increase to €150 in June 2018 and then €200 as of June 2019.
  • Variable compensation: Performance bonuses, which were previously discretionary, will now be based on predetermined formulas as agreed by both parties.
  • Employment terms and conditions: By agreement with employees, employers will permit greater flexibility in determining working hours, allowing for adjustments in working time during peak and off-peak periods. Total overtime will be limited to 120 hours per year for companies with more than 200 employees, and 128 hours for smaller firms. An additional wage premium for non-scheduled overtime will also be payable at varying rates depending on the nature of the day work.
  • Training and development: Employers will have to provide a training budget of €300 per employee and up to 24 hours of training over three years.
  • One-off payment: As of March 2017, all employees covered by the agreement should receive a one-off payment of €80.

Employer implications

Employers in the metal industry should budget for the various increases in employee benefits and perquisites. Furthermore, employers that currently provide discretionary bonuses will have to design formula-based performance bonus plans in agreement with their employees. Companies may consider renegotiating working hours within the more flexible rules of the new NCBA. Internal policies, including work rules and employee handbooks, will have to be amended accordingly.

The NCBA is often seen as a trendsetter, so employers in other industries are advised to assess to what extent their current policies conform to the provisions of the NCBA for the metal industry and closely monitor the collective bargaining developments in their own industry.

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